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Data Corp needs to buy new equipment to pursue new business lines in order to increase its value. The company has two options: Also assume
Data Corp needs to buy new equipment to pursue new business lines in order to increase its value. The company has two options: Also assume Option B will get a tax rebate of $2,000 in year 4 and $1,500 in year 8. Data Corp has a beta of 1.3, the risk free rate is 2.5% and the market risk premium is 8%. A. Calculate the IRR each option. B. Calculate the NPV of each option C. Calculate the Profitability Index (PI) of each option. D. Calculate the Equivalent Annual Annuity (EAC/EAA) of each option
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